HB346 Alabama 2016 Session

Summary

Primary Sponsor

Lynn Greer

Republican

Session

Regular Session 2016

Title

Retirement System, individual retirement accounts, authorize new employees to contribute monthly and provide opt-out provisions, Sec. 36-27A-5 am'd.

Summary

HB346 would require certain newly hired public employees to contribute to a public retirement savings account (PEIRAF) with an opt-out option.

What This Bill Does

It amends the law to make participation in PEIRAF mandatory for public employees who begin employment with a participating employer after January 1, 2017, with an exception for Employees’ Retirement System participants covered under 36-27-6. New hires would contribute $10 per pay period before tax, with a 90-day window to opt out without penalty; employers must provide written notice and allow changes to contributions. Participation in PEIRAF is in addition to existing Retirement Systems participation and contributions can remain in the account if employment ends, with no further contributions unless the person is rehired.

Who It Affects

• New public employees who start on or after January 1, 2017 with a participating employer (TRS, ERS, or Judicial Retirement Fund) would be required to participate in PEIRAF and contribute $10 per pay period to the account (pre-tax).
• Public employees already in the Employees’ Retirement System under 36-27-6 are not subject to the mandatory PEIRAF requirement, but may participate voluntarily under the PEIRAF rules.

Key Provisions

• Provision 1: PEIRAF is available to all public employees and is generally voluntary under board rules (with some mandatory applicability for new hires as described in Provision 2).
• Provision 2: Starting January 1, 2017, new hires with participating employers must participate in PEIRAF; ERS participants under 36-27-6 are exempt from this mandatory requirement; contributions are $10 per pay period (pre-tax); there is a 90-day opt-out window; employers must provide written notice and allow contribution adjustments.
• Provision 3: Participation in PEIRAF is in addition to participation in the Retirement Systems of Alabama (RSA) and does not replace existing retirement benefits.
• Provision 4: If employment ends, contributions can stay in the PEIRAF account, but no further contributions are accepted unless the person is reemployed by an eligible employer.
• Provision 5: The act becomes effective on the first day of the third month after it is passed and approved.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Retirement Systems